The company's revenue in 2018 increased by 3.77% over the same period last year, and its net profit increased by 6.75% compared with the same period last year.

On the evening of March 21, the company announced its 2018 annual report: business income reached 2.551 billion yuan in 2018, an increase of 3.77% over the same period last year; net profit of 90.29 million yuan, an increase of 6.75% over the same period last year, equivalent to 0.32 yuan of fully diluted EPS; net profit of 94.85 million yuan was deducted, an increase of 3.35% over the same period last year, and the performance was in line with expectations. The company intends to pay a cash dividend of 0.8 yuan for every 10 shares.

In a single quarter, the company's 4Q2018 achieved an operating income of 646 million yuan, an increase of 0.72% over the same period last year, and a net profit of 28.49 million yuan, a decrease of 11.61% over the same period last year.

A new supermarket lilac lake store was added, and the upgrading and renovation of the main store was carried out in an orderly manner.

During the reporting period, the company added a new supermarket lilac lake shop, with a construction area of 26000 square meters, which is the largest of the company's three existing supermarkets, and is expected to provide a new profit growth point for the company.

The company announced that it invested 120 million of its own funds to upgrade the main store of Taiyuan Street, which will be from October 2018 to October 2019. The transformation project aims to enhance the proportion of experiential formats, enhance differentiation and competitiveness. By the end of the reporting period, the project had been completed by 10%, and the transformation had been carried out in an orderly manner.

The major shareholder intends to transfer 29% of the shares of the company, waiting for the new actual controller to find out.

Zhongxing Group, the controlling shareholder of the company, intends to transfer 29% of its shares in the company in the form of public solicitation of the transferee. Zhongxing Group currently holds 33.86% of the shares of the company. If the transfer is successful, the actual controller of the company will change. This public solicitation and transfer will be carried out jointly with the judicial restructuring of Northern heavy Industry Group Co., Ltd. to recruit strategic investors, and the intended transferee of the company's shares shall at the same time participate in the judicial restructuring of Northern heavy Industry Group Co., Ltd as strategic investors.

This equity change of the company verifies our earlier judgment that the keynote of this year's industry is the reform of state-owned enterprises, but as the transferee of the equity has not been determined, its specific impact on the company's operation needs to be observed.

Maintain profit forecast and maintain "overweight" rating

We maintain the forecast of the company's comprehensive dilution EPS of 0.35 / 0.37 yuan for 19-20 years, and increase the forecast of 0.39 yuan for 21 years. At present, the valuation level of the company has increased due to the equity transfer of major shareholders, but its specific impact on the company's operation needs to be further determined by the equity transferee to maintain the "overweight" rating.

Risk hint: consumer demand does not meet expectations, major shareholders reduce the risk.